New home buyers help fuel remodeling surge
Thursday, July 21, 2016
Remodeling activity is at its highest level since before the housing bubble burst. With mortgage rates and home prices increasing, homeowners are choosing to fix up their current home rather than move up to a more expensive one.
At the same time, new home buyers facing limited availability of desirable properties in many markets are following a similar strategy: purchasing a more affordable home that meets their basic needs and then remodeling to transform it into the home they want. And when they do, they are turning to pros like interior designers to help them realize the home of their dreams.
Across the board, indicators point to renewed and growing consumer demand for remodeling and renovation services. In releasing the results on its Residential Remodeling Index for the first quarter of 2016, Metro Study announced a 4.3 percent year-over-year industry gain, the strongest growth rate since 2014.
A recent BankRate survey found more than half of homeowners (52 percent) plan to undertake one or more home improvement projects this year, including 28 percent who are planning to remodel or expand their home. Similarly, two thirds of respondents to the latest Houzz & Home Renovation survey had engaged in a home remodeling or redecorating project last year, and more than half (52 percent) plan to continue or start one this year.
While the majority of respondents to the Houzz survey have been and plan to remain in their current home for some time, more than 1 in 10 (12 percent) had purchased a home within the last year, and one-fourth (26 percent) undertook a renovation project specifically because they want to customize their new home. Recent home buyers also spent more on average than other homeowners ($66,600), second only to baby boomers ($73,300).
Nearly all those who recently purchased a new home (91 percent) hired one or more professionals to help them with their project. Of those, nearly a fourth (23 percent) engaged the services of a design professional. Interior designers and decorators topped the list (10 percent), followed by architects (8 percent), kitchen and bath designers (6 percent), and kitchen and bath remodelers (6 percent).
Kitchen and bath projects were the most commonly requested renovations, with more than half of respondents saying they were looking to update outdated designs and finishes. However, recent home buyers were nearly three times more likely to renovate all interior spaces, and roughly one-and-a-half times more likely to renovate non-kitchen/non-bathroom interior spaces than the average respondent.
Homeowners overall value design professionals for integrating and defining their design and style ideas, as well as for educating them. About half say they hired a design professional because they deliver a quality result.
Among those who hired an interior designer, more than half (52 percent) wanted help with finding the right products and materials, while less than a third were seeking design guidance. Clients were less likely to hire designers to assist with logistical matters, such as project management, staying on schedule or sticking to a budget.
Many homeowners still prefer to do it themselves, but these findings show that when it comes to larger, more expensive projects, they are willing to spend more to hire a professional to ensure they get the result they want. That is especially true for new home buyers who choose to renovate. They are looking to pros like interior designers to deliver a look and functionality that will serve them for many years to come.
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